Current account deficit sets record

The deficit in the primary balance, the most important indicator of budget performance, is increasing rapidly. The primary balance is accepted as a leading indicator because it shows on what scale budget incomes meet expenditures, excluding interest. A budgetary surplus signals a healthy balance but in Turkey, the deterioration in budget

discipline has gained pace since 2017. The balance surplus after the 2001 crisis, except 2019, turned into deficit as of the second half of 2018 on an annualized basis, except for a few months. The surplus of TRY 31 billion in 2013 decreased to TRY 8.9 billion in 2017 and TRY 1.1 billion at the end of 2018. The central administration budget gave a surplus of TRY 25.1 billion at the end of the first five months of the year, higher than the total of last year, after giving a deficit of TRY 23.8 billion at the end of 2019. The 12-month deficit amounted to TRY 28.7 billion as of May. The IMF (International Monetary Fund) defined budget balance increased to TRY 93.65 billion during the first five months of the year and to TRY 155.7 billion in 12 months as of May, excluding one-off incomes. The difference between the finance defined balance and IMF defined balance or, in other words, the annualized one-off incomes reached TRY 17 billion in May.

This difference stemmed from the transaction of the Central Bank’s profit and reserve funds to the budget. The Central Bank transacted a total of TRY 85.2 billion in resources to the budget in the last 12 months. The post-conflict reconstruction and paid military service allocated TRY 7.1 billion and TRY 1.8 billion resources, respectively.